Wednesday, August 29, 2007

I remember Top Gun. Where Sundown, Goose's replacement, is in with Maverick and they're going against Viper. Viper sets Maverick up with an easy shot. Cake, pure cake. And Maverick says, "It doesn't look good."

Sundown, not paralyzed by the loss of Goose says, "What do you mean it doesn't look good? It doesn't get to look any better than that!"

And so is the housing market.

Buyers, much as I have been on your side and advocating this is a buyers market, you are goofing up big time. Wake the ef up and quit being so God damned arrogant.

I don't know how many times I've seen buyers come into the market and have the unrealistic expectations that housing is just going to be given to them for free. Matter of fact, not just free, but the seller is going to pay them to take their house. Furthermore, I don't know how many friends of mine I've said, "Hey, have you gotten pre-approved? Now is the time to start looking." only to have them say, "Well, I don't know, you know. I mean housing is on the way down, I think if I wait a while longer I might get a good deal."

The only problem is in "a while longer" there may not be such great deals.

Led by a media blitz that the housing market is in dire straights, buyers have been led to believe to postpone their purchasing decision indefinitely. Only problem is indefinitely means you'll pass up on what is arguably going to be the greatest time in your life to buy property. Prices are on the way down, interest rates are still at a historic low, debt servicing costs relative to potential rents are reasonable, but oh no, we're not going to buy. We're going to wait until the market tanks even more.

Now, I've always insisted that prices are going to go down (which I still opine they will). But what I've seen based on anecdotal stories and some incidental research is that not only are buyers passing up on discounted prices, but they're passing up on prices where they actually cash flow. Where if you rented out the property, your rental income would cover the mortgage, insurance, utilities and taxes. In other words, buyers have unrealistic expectations and are going to wait too long.

So here is my humble advice to all you aspiring junior, deputy, official or otherwise economists;

Don't let this opportunity pass you up.

Yes, there is a glut of housing, but based on housing starts, they're cutting back production drastically. Which means that once this excess inventory is eaten through, you'll be back to a balance market, and I surmise rather quickly. Yes, yes, I've insisted that the market has a ways to go, which it does, but buyers have become so loth to pull the trigger I fear they'll NEVER pull the trigger until it is too late.

So for me, for yourself, for the sanctity and holiness of capitalism, do yourself a favor and at least get pre-approved for a loan and be on the hunt, be on the look out. It is an opportunity, especially for those of you aspiring economists that are younger that may not present itself again.

All that being said, I could be completely wrong, you could lose everything, markets are inherently risky, you are a fool to listen to my advice, blah blah blah and all the other legal mumbo jumbo that alleviates me of any responsibility of you investment decisions.

Friend of mine sent me this link to an old US propaganda poster from WWII.I could only imagine the furor that would arise today if something similar was done today...of course that was during FDR's days...which means he must have been TWICE the terrorist and racist that GW is.

And that was me about three years ago. I would go to management, present my research and my findings, showing them much more conclusively than a handful of pictures of German tanks that there was a housing bubble and that if they didn't pull back on the real estate development deals, they'd lose their shirts. I too was "relieved" of duty after I refused to capitulate and play ball and start producing research that they wanted to see, not that reflected the realities of the economy and housing market.

And so with today's news I watch as I see the Allies get slaughtered in Operation Market Garden, sitting there thinking "how many billions would have been saved if the banks just listened to me." Alas I don't have gray hair and therefore I'm just a dumb economist. But with housing prices dropping so quickly...

Sunday, August 26, 2007

Seriously, those of you who think the price of gas is somehow being manipulated have just got to look at the refining capacity here in the US. Heck, we're the world's largest economy and consumer of oil, you'd think we'd have the largest refinery here.Nope. India and Venezuela. Heck, Singapore has a larger refinery than we do. Again, it's economics, it's not that hard people.

Saturday, August 25, 2007

Here are some pictures from my trip to Montana. Thought I'd share some with you.

This is Flinsch Peak. I decided to climb it the first day I got there. Only problem was that's not mist or haze, that's smoke from all these damn forest fires they had out there.

This is a picture from the top of Flinsch Peak looking down at some other mountain. You can make out Old Man lake at the bottom right. The map says the peak is 9,225, but my GPS said the elevation was 9,276. Regardless there wasn't a lot of air up there, just smoke;

This is what Flinsch Peak looks like when there is no smoke (it's the pointy peak to the left);

This is Hidden Lake, more or less smack dab in the middle of the park;

This is Hungry Horse dam. It's bigger than it looks. They canceled the tours thanks to those SOB's on 9-11.

This is Iceberg Lake and its surrounding cauldron;

This is a moose;

This is a ram or mountain goat or something with horns. Kept following me around. I surmise people have fed the goats because they follow you around and have no problem walking where humans are;

Friday, August 24, 2007

I was always interested in the different ways by which economists check the growth of an economy. Traditionally you measure it by calculating GDP, however accounting errors or erroneous assumptions can result in inaccurate measurements. Or in the case of China, political pressure to "make" GDP growth a certain number. But by measuring other things you can check the "official" GDP figures to see if they're legit.

For example, Alan Greenspan (if I recall correctly) liked to look at rail road ties and repairs and the more the economy grew, the more goods were being produced and thus the railways of our nation were further worn.

But another simple, but ingenious way of going about checking economic growth figures is electricity usage. This should be in direct relation to GDP.

Originally I had misread the chart as I assumed electric useage was falling behin GDP growth, but then Zephyr pointed out to me that there are two scales and that electric use has actually EXCEEDED official GDP reports. GDP is growing around 11-12% while electric use has been between 12-16%.

Wednesday, August 22, 2007

So I'm about to round off my vacation here in Montana and I had a repeat experience that has repeated itself too many times now to be coincidence so I need you lovely and sexy female economists out there to explain this to me;

Last night I go to one of the local bars out here in the Glacier National Park area. I run into a motley crew in the truest sense of fun loving 20 somethings who are spending their days contributing to GDP by running rafting tours, rangering, and other sorts of odd jobs. Everybody is having a good time, dancing and drinking at the local bar. One of the girls in the group fancies me and constantly strikes up conversations, asks me to dance and basically does all the leg work that the guy normally does.

Now, not to be mean or rude, but just to state the truth, I have no romantic or sexual interests in this girl because she is a little overweight. Call me a jerk, call me an ass, but that's just the way it is. I have no physical interest in this girl. That being said she is a nice girl and I genuinely enjoyed her company and very much enjoyed her conversation until....

The "Mother Hen" would intervene every time this young lady and I would embark on a conversation.

We would be in the middle of an engaging conversation and this other girl would come out of nowhere and pull her away from me.

We would be in the middle of a dance and sure enough the Mother Hen would yank her away in the middle of the dance floor.

And it angered me to the point that here I am, an innocent guy, with no plans or intentions with this girl and some nazi-goose-stepping, nanny-state totalitarian intervenes somehow thinking she's doing the Lord's work and "saving" this girl from my evil clutches when I had not clutching intent.

Now normally I would write this off as some crazy chick, but as I mentioned before, this is a repeat occurrence, and nor is it relegated to young 20 somethings.

A mere year ago I was hanging out with my good buddy Enrique. He's about 50 and we're with his buddy Ron who is also about 50. The establishment we were at was on a lake and a boat pulls up to dock and off walks a girl that Ron knows and works with. I forget her name, but she too was middle aged.

So Ron and this girl are in the middle of a conversation. And again, Ron has no plans or intentions with this girl. It was obvious through their conversation they were cordial, professional and co-workers.

But sure as scheit, another middle aged woman comes out of nowhere and "yanks" this girl away from Ron in the middle of their 100% innocent conversation.

Now I thought this was an ailment largely relegated to young teens/early 20's type women. But with this resurgence in instances of the "female yank" and at ages in excess of 30, it seems to me to be a mental illness or an ailment that transcends all ages and something I'm going to run into again and therefore will need to know how to handle in the future.

So my question you sexy intelligent economists of the female persuasion is this;

Wednesday, August 15, 2007

Again, as I have said before, if you really want to impress the girls at the clubs, you should really just bring your laptop in, crack open Excel and start making charts. Having the latest issue of The Economist folded and tucked in the back of your pocket with "The Economist" logo showing out will help too, but chicks really dig charts.

Plus, charts make you smart. Take somebody who never looked at a chart. Their arguments consist of "well I just FEEL" or "I just think" when there is no substitute for "I know."

Therefore I thought it worth our while to post a bevy of charts I've had stored up in the past couple of months that I haven't gotten around to posting yet. And since I'm off on vacation in a couple days, I will not be posting for a good solid week, so consider this a week's worth of posts.

But before I go on vacation one other request I have is that I've had a GREAT response to Help the Captain Help the Major, supporting my buddy who is returning to the military to go to Baghdad. The idea was to gather a lot of pictures of different folk from around the world to make what would be a nice calendar for him and his detachment to have in their barracks. However, I've received more than 12 photos so I've decided to make a photo album for him instead (HOWEVER, I have received some pictures from some lovely ladies, so if I get 10 more of those, I might make a calendar out of that which our boys in camo would certainly appreciate - plus he's single ladies! ;)

In any case, I expect my e-mail box to be FULL of photos of all you good folk (and maybe some classy 1940's poses from some of the ladies out there) upon my return. My e-mail is captcapitalism@yahoo.com (ensure you copy and paste the e-mail because people keep misspelling it). This is the LEAST you can do to help the Major and his detachment!

Anyway onto the charts;

Chart 1 makes a great case for going nuclear with our power production. Since global warming is the biggest threat to world (even more so than radical Islam) then it only makes sense to go nuclear. Of course the leftists will protest that too, betraying their true incentives; to destroy capitalist economies.

Chart 2 shows what I KNOW to be the true engine of economic growth; innovation and creation. I was surprised the Swiss were so high, not that I wasn't expecting them to be creative, I've just never heard anything about the Swiss before.

Chart 3 shows once again the US spends more than any country on health care. I've often thought about taking health care out of GDP and GDP per capita figures as an adjusted measure for the true standards of living, for I think the majority of the money we spend on health care is wasted. The chart also shows health care taking a larger and larger percentage of the economy. Soon when the baby boomers retire we'll all be working in nursing homes or the medical field.

And chart 4 just kind of jumped out at me. I knew white men were the more prolific committers of suicide, but I didn't notice that black males also commit suicide relatively more as well. Plus the time lag between the two groups committing suicide. Blacks peak in their 20's while whites peak in their older years. Any social scientists that have an explanation for this?

Anyway, enjoy the week all. I'll be out climbing mountains. AND FILL IN MY INBOX WITH PHOTOS!!!

Monday, August 13, 2007

I may have great disdain and disrespect for the Baby Boomer generation, but I will grant them one thing;

They worked their asses off as kids.

Their labor force participation rates were through the roof back in the day when they were young achieving the highest levels on record. And (a smug point I might add) that despite our loserness, we Gen-X'ers (at least the older ones) managed to achieve a similiarily high participation rate.

But good lord, what the hell happened to Gen Y????

Labor force participation rates for teenagers has tanked since 2000 to the lowest level on record, and precipitously so.

Now I'd like to go on and speculate about how children are spoiled rotten today. I'd like to go on about how parents find it easier to pay off their children than to bring them up right and teach them a work ethic, and I'd like to go on and point out it's my generation that taught their children this lack of work ethic, but frankly I find it pointless. Parenting has deteriorated to the point it is unsalvagable. Whatever I say will fall on dead ears or ears that have already plotted and set a course for the destination of arrested development for children and ultimately to the detriment of our economy...not to mention the likelihood I will never never see a social security check with that work ethic. And so I will write it here, just for the rights to say in the future "I told you so." For this lack of work ethic will be one of the key reasons for the inevitable collapse of our economy and our continuing decline as a world super power.

And to all the Australians that are e-mailing in, THIS IS AMERICAN DATA! This has nothing to do with Australian Gen-Y'ers. I have no clue what the Australian data looks like.

Sadly I don't think love will get us through this housing market because based on this chart, we have about another year before all those ARM's are done resetting...of course then there's a new wave of option ARM's coming due for reset.

So, if you want to get an idea of when this housing market will "recover" it looks like at least another year.

"I'm too busy with work, and if I get a break I'd rather play Raving Rabbids than go to the bar or dance club."

And this perplexed him a bit as to why his eldest would prefer to play a video game about rabbits than go to the local discotec and flirt with the ladies on a Saturday night. But my father, who was not trained in the Economic Arts, does not fully comprehend the concept of opportunity cost and expected rate of return which warranted a lesson in economics that I think we can all enjoy.

Picture if you will it tis a Saturday night, like it is at this very moment while I am writing.

You have this precious evening off without the reminding responsibility that you must go to work tomorrow. Most people view this as the best time of the week since they are truly, and very Americanly "free." So how you spend this time is very important as you would like to get the absolute most out of it. Leaving you, me and every other red blooded American bachelor out there with the classical, philosophical debate of our time;

"Do I go out and scope out chicks, or do I stay at home and play video games?"

Yes, this great and unsolvable question has plagued mankind for thousands of years. Ever since the Atari 2600 came out (thousands of years ago) bachelors of all colors, creeds, religions, regards, stripes and sizes have asked themselves;

"Do I stay in and play video games? Or do I try to hit on chicks?"

And you girls may mock us, but we truly do debate this in our minds. And more so than you may think.

When it comes to any other decision, we spend less time making it than we do the aforementioned. For example;

"Do I want to hit a jazz club or a rave?" - Decision time 14 seconds, "what has the lower cover?"

But when it comes to a Saturday night and you've just recently purchased yourself a video game where you can beat cute little rabbits senselessly, that easily takes up 2 hours of contemplation.

And the reason is two fold;

Opportunity costs and expected rate of return.

It's MY Saturday night. This precious and rare time of the week where I am truly free. Now, do I go and spend it chasing down the local lovelies, trying to enchant them with some witticism or line, only to find myself $30 poorer and with a phone number that only has 6 digits or starts with "555" and maybe, MAYBE if I'm lucky land a date that isn't psycho? Or, do I look at that 6 pack of Samuel Adams in the fridge, remember I have Halo 2 and call the guys over to engage in a 10 hour, Sam Adams-sponsored Halo-killing-fest-extravaganza where I am guaranteed, GUARAN-freaking-TEED to;

1. Have a blast2. Get drunk3. Have a blast while getting drunk4. Have a blast while getting drunk and blasting away my best friends with the plasma rifle5. Spend at tops, TOPS, $7 on beer, and if lucky, I'll end up with a surplus of beer because they'll forget their beer as they go home half-inebriated.

The second issue is expected rate of return. Sure, I'd like to go to the local hoity toity bar and find myself a rich, Selma Hayek look alike, but that has not happened in the past 16 years, so I don't know why it would happen now. However, I am guranteed, GUARAN-freaking-TEED once again to have a good time with my buddies, playing video games, grilling, and having a beer.

And I think both the universal and age old paradox of what to do with a Saturday night and a rule of financial management governs both decisions in retirement planning and what you do with your Saturday night.

When you are young and foolish, you have all the time in the world. You can invest or engage in outlandishly risky ventures where the payoffs are high, but very unlikely. Invest in a hedge fund, trade options, do what you want, because you have all the time in the world. But as you get older, you need more for-sure things. You want that fixed income. You want that guaranteed rate of return with little to no risk. Therefore Saturday nights and portfolio management theory have much in common for as we wise men of bachelortude age, we look back at our youth and see how much time and money was wasted at the clubs and the bars. And when we did land a date, what kind of quality and caliber it was that we succeeded with.

And thus, in our old age, we realize that it's more important to get a rate of return than to effectively gamble hoping to win the lottery. That a night playing vids with the guys, watching a good flick, or heck, who knows, blogging about the opportunity costs of a Saturday night is going to provide us with a higher expected (and more often) realized rate of return than putting on the old gear and heading out to chase after some girls. Alas, therefore you can forgive if I return to playing my video game.

(Coincidentally, it is a REALLY funny video game. Here and here are examples of the game I'm playing. You don't even have to be drunk to enjoy it, besides how can you NOT play a video game with these guys;

Friday, August 10, 2007

Well you may know him or not, but a good friend of mine has postponed his career as a corporate lawyer and rejoined the military, and that is the blogger Swanblog.

He will be stationed in Baghdad and I was thinking it would be nice to compile a calendar for him of all the different people that appreciate his service. Plus, he was telling me how they basically take semi-truck containers and convert them into housing for the troops as cargo is unloaded.

So picture this fellow capitalists, economists, junior, deputy or otherwise;

My good buddy, living in a trailer container, with a hole cut out for the air conditioning in the middle of the desert. And in his little corner of this trailer in the middle of the desert there's a calendar with a bunch of people he doesn't know, but they appreciate what he's doing. And then when people come in and look at the calendar they say, "Hey, who are all these people?" he says, "I don't know, bunch of crazy American blogger people, but they appreciate us and they just wanted to let us know."

I think that would give warm fuzzies to everybody. But in the desert, I think they'd prefer cool fuzzies.

Regardless, help make with the warm fuzzies (or cool fuzzies) and send me your pictures (tasteful of course), and I'll put together a calendar for the Major.

E-mail your photos to the Captain at captcapitalism@yahoo.com (it's not "captain" capitalism", it's just "CAPT" capitalism, people keep goofing it up) and I'll send them to the Major.

Thursday, August 09, 2007

Sorry, short on time and time for a repost. The best of. Preparing for a big time trip out west. Glacier National. Yellowstone. Grand Tetons...what they hell is a teton?" Anyway, hope you new readers enjoys, you old readers reminisce, and all you junior deputy economists forward it to somebody! (Seriously, I'd be curious to see the statistical ramifications to see if people just insisted on forwarding it to somebody else. Forget whether you have a genuine interest in the post, but if people DID forward it to other people just out of curiosity to see just how many people it would reach.)

It was during the closing few moments of what I call “The Dark Days” in Captain Capitalism’s life that I substitute taught at the public schools in the Twin Cities metro, thinking that perhaps I would want to become an economics teacher. Only to find out that what goes on in the school system is not so much education or teaching as much as it is baby sitting children’s children and making sure you don’t upset anybody or do anything that anybody would disagree with or perhaps even be slightly uneasy about. It also gave me a grudging respect, or perhaps pity, for the impossible situation public school teachers are in;

Try to teach children who never have been disciplined in their lives without meting out discipline yourself.

Impossible.

However, while I quickly found out I would NOT like teaching, I found something I did like.

Something I didn’t know I would have liked before.

Grandchildren.

I was substitute teaching kindergarten one week, not really thinking much about it before my first day. Just go in, deal with the little runts, collect my check and go home. But outside banging up my shins something fierce on the “kindergarten furniture” which is all 1/3 scale adult size, I actually found the little snots pleasant, borderline fun.

The reason I came to realize why is that they’re still innocent, they’re still curious and, frankly, they’re so trusting you can manipulate the heck out of them.

Such trust came to my advantage when we were making snowflakes for the teacher (who was sick). Soon I realized that it was winter and that it’s a 45 minute procedure just to get them into their winter garb because none of them know how to dress themselves;

One needs help putting on the bootsThe other is trying to put snowmobile pants on with their boots already on.You ever see a kid put a jacket on backwards and sit there for a full 30 seconds looking at their front wondering where the zipper went?“And no Jimmy, those are gloves, they go on your hands, not your feet”

Regardless, that was a 45 minute process and the buses were coming to pick them up in 55 minutes AND the room was a mess with little paper schnerbles a strew on the floor.

What is a substitute teacher to do?

So I came up with a brilliant idea and said to the kids,

“OK guys, you want to play a game?”

Their eyes shot wide open, all of them, “oh yea yea!!!! We want to play a game WE WANT TO PLAY A GAME!!!!”

Using cunning reverse psychology I said,

“Oh, wait, I don’t know. On second thought it really is more of a FIRST GRADER game. Never mind, we can’t play the FIRST GRADER game.”

That alone had them eating out of my hand. Practically jumping out of their seats, borderline some of them going into cardiac arrest,

“oh oh oh!!!!! Oohhh!!! We want to play the first grader game!!!!! PLEEEEASSEEE!!!! Let us play the first grader game.”

“Wellll, I don’t know. I could get in trouble…you have to promise not to tell the teacher when she comes back.”

“OH OH!!! WE PROMISE WE PROMISE!!!!!!! WE PROMISE!!!!”

“OK, well raise you’re right hand.”

Which I didn’t foresee would be a problem with half the students.

“No, no your RIGHT hand. OK, repeat after me;

“I”

“I”

“Promise”

“Promise”

“Not to tell anybody”

“Not to tell anybody”

“We played the first grader game”

“We played the first grader game.”

Once I had their oath, I was pretty sure I’d be able to clean the room and have them in full gear and on the bus in time.

“OK, you 5 are blue team.”

“we don’t want to be blue team”

“Uh, ok, how about red.”

“I don’t like red.”

“ALRIGHT, FINE, GREEN? IS GREEN OK?”

Yes, they were satisfied with green.

“You guys are yellow team, you guys are red team, and you guys are blue team”

Which ever team picks up the most pieces of junk off the floor wins a prize!

“OH OH !!!! What’s the PRIZE WHAT”S THE PRIZE????”

Waiting, looking around to make sure nobody was looking or listening in I said,

“It’s a SUR-prize”

“OOOH!!!!! OOH!!!!! “

Before they blew their little gaskets I figured it best to let them clean up the place. And with no forewarning I said,

“123GO!!!”

Boom! Place was clean in under 4 minutes.

Once the room was picked up to my satisfaction I called an end to the game and inspected each team’s pile.

“OK, ok, very good there red team. Honorable mention. Yellow team that’s a fine pile. Blue team, very good, but I think the winner is GREEN team.”

All of green team went more rabid than a bunch of drunken Germans at a British soccer match.

“What’d we win, what’d we win!!!????”

And looking straight into their trusting, excited and hopeful eyes I said,

“You win my dignity and respect.”

Dead silence.

And one of them sheepishly peeped up,

“That’s not a prize.”

Of which there was no time to debate because the bells rang and it was time to get geared up for the buses.

It was this experience, the concept that I could have that much fun with a bunch of little disease spreading snots AND send them on their way to have somebody deal with them and actually pay for them made me think that having children would suck, but having grandchildren could almost be tolerable.

The next day it convinced me grandchildren would be a blast.

For the next day was the FIRST SNOW FALL OF THE YEAR. And here you have these little 5 year old kids, who for them is a big experience. For it was one thing when the snow first fell when you were 3 or 4. But when you’re in school and it’s the first snow fall, then it is the eleventh commandment that you must go out and have a snowball fight.

Leave it to the nanny-Nazi’s to spoil our fun. I was already scheming a massing snow ball fight with red team, blue team and yellow team, but the iron maiden principal came over the intercom.

“I’m aware that it is snowing, but as you know it is school policy there will be no snowball fights and no recess outside. Recess will be held in the gym.”

You might as well have taken each of these kids and shot their pet from home right in front of them.

This first big time experience, the first snowfall of their first year in school. And this fascist bitch who kowtowed to her hyperactive, over sensitive, leftist, commie bastard overlords “all risk must be eliminated at all cost” thought nothing of denying these kids their God-given right to a snowball fight on the first snow fall of their first year in school.

The hell they weren’t getting a snowball fight. And I had the perfect alibi, “I’m just a dumb substitute teacher.”

Now, you think it’s a big ordeal getting 30 snots geared up in winter gear in preparation for the buses. Try doing it clandestinely so the principal doesn’t find out.

Cripes.

Bring all the gear into the classroom, put the gear on in the classroom. Keep them quiet while you’re walking through the halls. “No, Jimmy, that’s a glove damnit again!” Hope to God no one sees us making our escape out the back door. But once we were out, the fruits of our labor paid off.

The little snots running around in the snow, making snowballs faster than they could throw them. Using the substitute teacher as a shield. Ganging up on the substitute teacher. The substitute teacher, perhaps, maybe grabbing the occasional kid to use as a shield for incoming snowballs. Their little unformed arms throwing snowballs with the accuracy of Republican Guard tank gunners. The runt of the little, some little girl that couldn’t have been more than 2’9” with a huge grin on her face, even though I don’t think she managed one direct hit. All the meanwhile little faces you could see smooshed up against the windows from inside the school. Pointing at my students that got to have a snowball fight. Begging their teacher to let them join the free world. Only to have the teacher deny their request and conform to Nazism.

But not my students, they were going to have their day…of course I was going to have my day too.

27 years old and I’m still getting called down to the principal’s office.

Despite the lecture I got about “rules” and “legal liability” and everything else that has taken whatever vestiges remain of childhood and thrown them in the toilet, I still stood by my decision. I frankly, by this time, didn’t care, because I had also substitute taught babysat for middle school which quickly made up my mind that I was not going to pursue a teaching career anyway.

But it did clinch my decision that grandchildren would be the best thing in the world.

Of course the paradox is that the pleasure and fun grandchildren would bring, is not worth the pain and agony regular children would give. And so, as a way to circumvent this cruel law of nature, I have lobbied my sister to start having nieces and nephews. Heck, I may even start donating time at an orphanage, but I must maintain my image of an evil, fascist capitalist, so I would have to do it clandestinely.

Regardless, the whole point is that, accidentally, I happened upon this little joy of life. Who would have known little snots could be so fun. As long as they go home to their parents, and I can veto authority and do away with the rules you can have a blast with the little wealth-consumers (as long as it isn’t your wealth they’re consuming). Grandchildren are hands down one of the best things on this planet to enjoy.

A woman, 57, who is a grandmother of 41, decided to blow herself up to attack Israeli soldiers.

Now I know that this is the Gaza strip, and I know that this is a different culture, but it is insane to me that if you have 41 grandchildren, with such a potential for such fun and happiness in life, not to mention at the relatively young age of 57, why on God’s green earth would you kill yourself and not just deny yourself such a grand time of snowball fights, vetoing parents, and tricking them into cleaning up their rooms, but deny them a grandmother?

And of all things to “lightly wound 3 Israeli soldiers????”

You end your life, pass up a great life and deny 41 grandchildren their grandmother to “LIGHTLY WOUND 3 Israeli soldiers?”

First you suck at suicide bombing. All the training, all the psychological preparation, all the gear, and you just “lightly wound” 3 Israeli soldiers? I mean you REALLY pissed your life away.

I can see them immediately after you blew yourself up;

“Hey Bob”

“Yeah?”

“Looks like you got a little shrapnel in the leg there.”

“Oh, didn’t notice. I think it’s just a piece of grit. You sure I’m wounded?”

“Yeah, I think I see a little blood. Better go and get it checked.”

“You think?”

“Yeah, better be safe.”

Bob goes to get it checked, doc looks at him;

“What they hell did you come in here for this scratch for??? Here’s a band aid, get your ass back on patrol.”

Secondly, look what she gave up for “lightly wounding” 3 Israeli soldiers.

41 grand children.

Cripes, I had 30 little snots under my command. It was a blast. How could you pass up all the fun games and times you could have had with 41 of them???? The holidays, the games, the reverse psychology. You name it, the possibilities for fun are endless with 41 of those little tykes running around!!! But no, you opt to blow yourself up.

So I tendered this question to my audience on my radio show. Why would this woman do this? Why would she pass up 41 grandchildren to LIGHTY FREAKING WOUND all of THREE, count them, 1, 2, 3 Israeli soldiers?

And I got two answers.

Jamall called in saying she did it to protect her grandchildren. That the Israeli’s were going to hunt these kids down and kill them anyway and this was the only thing she could do to protect them.

Ignoring the brainwashed conspiracy theory aspect of this, I just poked at his logic a bit and asked him, “well, wait, wouldn’t she have done more damage if she was a sniper or just stay at home with a shotgun?”

“Well the Israeli’s have all the guns and weapons. That’s why they throw rocks.”

Sure, fine, but why do I see Hamas and Islamic Jihad with AK-47s ripping off rounds into the air? And if the people in the Gaza strip are “stripped” (har har har) of their weapons and Isreal’s goal is to destroy them, what’s stopping Israel from coming in there and wiping them out?

Of course the answer is that Jamall wants to believe in what he wants to believe, which points to the fact he has an agenda and really isn’t concerned with logic or the truth. Just, I presume, coming up with a reason to blame Israel and the US.

Regardless, it still didn’t answer my question to my satisfaction. Why did this woman give up her life that would have involved 41 grandchildren?

I was toying around with the idea of brainwashing. That maybe with her 9 children and 41 grandchildren she was destitute and poor. There was nothing to live for, so why not take the express train to Allah?

Then the wife of a former Israeli soldier called in;

“They’re paid $25,000 by Hamas to go on suicide runs.”

Now, call me cynical. Call me an Israeli sympathizer. Call me an infidel. But take your political and religious leanings out of it and ask yourself which explanation is more palatable?

“This woman killed herself because she was trying to protect her grandchildren?”

Or

“Hamas paid her $25,000 to do this and it would go to help her family?”

Of course the second makes the most sense, and is probably true. But despite the bounty of $25,000 and a “guaranteed audience with Allah” I’ll still take happiness provided by the now orphaned 41 snots.

Tuesday, August 07, 2007

Suicide is something that I don't get. Not that I can't see why some people would commit it, but that they don't go and try to pull some amazing crazy stuff before they go. Everybody just blows their brains out without doing anything great before it. I mean if you're about to commit suicide wouldn't you say, "Hey, you know, it'd be great to go moon that cop that has a speed trap over on 38th." Or, "you know, it'd be pretty cool to go up to the hottest chick and say, "you're too fat for me." Or rack up a huge bill at some ritzy restaurant and then just say, "Eh, I don't feel like paying, besides which I'm dying tomorrow, so what are you going to do about it?" Not to mention cliff jumping, sky diving, you name it.

However, from an economics perspective what I don't get is how Australia and Ireland have some of the highest suicide rates. Their economies have been growing by leaps and bounds and then everybody offs themselves? I mean the French I could understand, but the Irish?Frank you got any theories??

Monday, August 06, 2007

As I have mentioned before, I am no big fan of Bush. Nor do I hate him. I do however pity him as it seems fashionable to "hate GW." And let's be fair, he's kept us safe, kept the economy going and this after a stock market crash from Dotcom Mania and a terrorist attack. If it were 1946 he'd be a hero and his polls through the roof, then again, the quality and caliber of your typical 1946 American is infinitely better, wiser and more mature than their American Idol-watching, modern day counter parts.

Regardless, what exposes this unfounded hatred the left has for Bush is the hypocrisy that "Bush is a moron" yet he is able to orchestrate any number of evil mastermind plots. He's stoooopid, but he was the true person behind 9-11. He's a moron, but he is so smart he can manipulate oil prices (in spite of OPEC). Bush is Hitler, but wait, Hitler was a genius, so he's a stupid Hitler.

Regardless, the impetus for this post was The Bad. The Bad exemplifies this better than I could. You should really check it out...if you don't, GW will arrange for your assassination...that's if he's not too busy trying to figure out how to flush the toilet.

Middle Age Man was a SNL skit, but I think today it should be reinvented to include a middle aged man who is a banker and the skit or punchline would be he comes in with crazy ideas about real estate projects that stand as much chance as I do with Selma Hayek.

So let me give you a little inside information about the banking world.

Bankers are paid on commission. So if you come in and say, "hey, I have an idea to make little truffles or trinkets and need $40,000 for a trinket machine" it will take about 30 days for them to pull their asses off the golf course get around to looking at your proposal and then another 30 days to shoot it down. And it doesn't matter if it's a great idea, the problem is the amount of money you're asking for is not high enough.

Now, if you're some bloated, embezzling real estate developer that never really makes money, just keeps rolling over debts and hoping asset values go up faster than your debt load, bankers like you because you're probably going to ask for more than $40,000 and therefore they'll get higher commissions.

This results in a perverted incentive to approve larger loans since the commission would be larger, regardless of the likelihood of repayment.

So you could imagine the excitement when a real estate developer would have a proposal not just to build town homes, but LUXURY town homes that would be priced in excess of $1 million. Bankers would fall over each other to approve such a loan.

There's just a couple problems though with these luxury town homes.

First off, if I'm spending a million dollars or more on a house, it isn't going to be a town home that I have to share with other people. If I'm forking over a million dollars, I want my yard so big that I don't see houses within a 20 miles radius of my house. So when I'd see these proposals I would always scratch my head when asking "who exactly comprises the market for this?"

Secondly, I remember doing my research at the time and seeing that in one year more "luxury" town homes were under construction than had been constructed in the past 3 years in the metro area. I remember presenting my findings to the then corporate mucky mucks who pooh-poohed it away.

So during my monthly perusal of the Minneapolis Area Association of Realtor's research page I was laughing my ass off when I saw this;

56 month's supply of new town homes are on the market in the $1 million + range AND THAT"S JUST THE NEW CONSTRUCTION!

So those banks get to keep lending money to these real estate developers for the next 5 years until those properties sell. Sadly enough interest will accrue to the point the amount these developers owe the banks will exceed what the town homes will sell for, but that doesn't matter because as long as the banker got his commission then everything's alright.

Regardless, there's a lesson here all junior, aspiring and deputy economists. And that is you may not be popular, you may temporarily slow down your career, and you may have middle aged men angry with you because you're not playing ball and making it so they can afford a new Lexus, but it's all worth it in the end when you get to tell them;

"I told you so."

So to all those bankers who ignored basic economics and market research, to all those bankers who made loans to their friends because "they're good guys," and to all those bankers who are now unemployed or working as a car salesman, me, my colleagues and a bevy of other economists, analysts and researchers who were sounding the bells quite some time ago, just have one thing to say;

Saturday, August 04, 2007

Permit me, if you will, a deviation from economics and allow me to share a side aspect of my life with all of you who read Cappy Cap, and that is my side hobby of fossil hunting.

As I mentioned a week or so ago I had gotten word of a fossil bed in northern Iowa. This is convenient because the majority of the fossils I find are located in Wyoming, the Dakotas, and Nebraska, while Iowa is a two hour drive from Minneapolis. I took some pictures and would sincerely appreciate sharing them with you;

This is me getting ready for the big fossil hunt;As you can see I was not in a good mood. I had to wake up at 6AM to make it down there in time to not only have enough day light to search for fossils but also enough time to get back. I don't like sleeping in hotels, I don't care how comfy the bed is, there is nothing more comfy than your own bed. I remember driving back from Guadalupe National Park after a fossil hunt there straight back to Minneapolis which took 33 hours, no sleep, no stop. I like my friggin' bed. I truthfully can more easily sleep in a tent than a hotel room and that's convenient because you have to pay for a hotel. A tent you just pitch.

Anyway, I came into the town of Rockford where the reported fossil bed was found.

Sadly to my discovery I found out that the information I got was not necessarily a secret and quite dated. Matter of fact the whole town kind of prided itself off of the fact that fossils had been discovered in that area;

They even advertised it on their water tower;

With the lost allure of me being the only one privy to this information I decided to go to the fossil beds which were located just outside town. An old abandoned quarry that hit water and ceased their operations. To this day, and maybe one of you is an expert in aquatics can tell me this, but how the hell do bass and blue gill end up in the lakes that form in quarries when there was no water there previously nor any tributary feeding it? There were turtles, fish, and all manner of aquatic life there. Anyway, I started looking for fossils.

Sadly I did not take any pictures of the quarry. Didn't really occur to me. But I found this one picture on the internet which doesn't do it justice, it's literally 9 times this size;

But the good news is I did find some nice specimen there. This is a photo of some of the better fossils I found, boiled and cleaned at the Captain's bachelor pad;

Truth is though, there was literally limitless amounts of fossils. And this is a good thing. Because at my age there's a fair amount of single mothers with young boys who are fascinated with fossils which provides you a great in. I remember going to the dentist and there was a single mother there with her kid and he was reading a book on dinosaurs. I had recently returned from a trip in South Dakota and remembered I left my bag with some fossils in it in my car. I grabbed the bag and while his mom was getting her teeth worked on I striked up a conversation with the kid and he just about passed out when he saw the fossils I had. Ended up getting a date out of that little charade. Since then I've kind of kicked around this half-assed business idea/theory about hording a bunch of fossils and then selling them to men in their late 20's and early 30's as a means to get them an "in." Oh well.

Friday, August 03, 2007

As some of you know I've lived in Minnesota for the past 14 years and am an economist here. I am very familiar with the bridge because I used to drive on that bridge daily and could see it from two of my living quarters whilst going to college. And I'm just as familiar with the state budget and finances here in Minnesota as well.

So I find it my duty to point out that when the inevitable call from the left comes to raise taxes to pay for crumbling bridges and infrastructure, (when we yet to know the cause of this particular collapse), that it is not a taxation problem, it's a spending problem.

And unlike everybody else out there, I'm going to prove it.

First is the Minnesota state budget. The vast majority of our money goes to two things;

Education and health and human services.

Only 7% goes to transportation.This may cause those on the left to point and say, "See, SEE!!! We barely spend anything on transportation! We need to raise taxes!"

Well hold on there little buckaroos. The question is what would our overall tax rate in Minnesota be in the first place? Are we taxing enough? As it turns out we're already the 6th highest taxed state in the nation (and by some measures we're 3rd);

Also the state of Minnesota takes 7% of GSP (Gross State Product, my apologies for the age of the chart).

So it's pretty hard to argue that we don't tax enough. Matter of fact, we probably tax too much. And therefore it isn't a taxation problem, as much as it is a spending problem.

Thursday, August 02, 2007

I wish there were more studies of this to see if those who predict are actually accurate. Truthfully though The Economist never made this forecast, rather an economist at HSBC submitted this chart to The Economist 2 years ago, but I'm amazing how accurate it's proven to be, and how closely correlated it is to China's demand for oil.

I figured the knee jerk reaction from the left will be to capitalize on this tragedy as a way to increase taxes because we don't spend enough on transportation. Therefore, to preemptively strike this argument I dug up one of my old charts showing where we spend all of our money in Minnesota.

I suggest we transfer some money from health care, welfare and education to transportation.

So I was playing volleyball when the bridge collapsed, I got back and had about 7 voicemails seeing if I was OK. And instead of spending an hour calling everybody back, I figured I'd just post to let everybody know, yes, indeed, I am still alive.

What's scary is I took this bridge at least twice a day, and more back when going to college. The bridge is just 2 miles down the road from my old place. Have to head into the city, might see if I can get some decent pictures for you all.

Wednesday, August 01, 2007

Again, the problem here is poverty, racism, George Bush, and global warming, not this woman being an idiot, perpetuating a legacy of teenage pregnancy. I had to do the math and I figured if she and her daughter get pregnant at 13, with a 9 month pregnancy each, this could be done.

I don't know about you, but when I was 13 I was playing Kid Icarus on Nintendo and "Kick the Can."

I received a request just to post this chart showing corporate profits as a percent of GDP.I must admit to not knowing the cause of this recent run up (though I recall something about being able to repatriate profits from overseas at a certain tax rate lowered by GW? Anybody know if that's correct?)

Regardless that chart has just got to anger the living patoots out of the left.